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Emini Bull Reversal and Test of January 30 Low

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Trading Update: Monday February 27, 2023

Emini pre-open market analysis

Emini daily chart

  • Emini bull reversal and test of January 30th low wanted. The Emini reversed up on Friday after falling below the January 25th low. So bulls want a strong reversal up.
  • While the channel from February 14th is tight, the selloff looks like a bear leg in a trading range. This increases the odds that the breakout point (February 10th) will get tested and closed.
  • The bears want the downside breakout to continue lower; however, the market will likely need a two-legged pullback and see what the bulls can do.
  • The market is also right at the 4,000 big round number, which has been a magnet for almost a year and will likely continue to be a magnet for some time. This means traders should expect the market to oscillate around 4,000.
  • Overall, the bulls have a buy signal from last Friday, and traders will pay close attention to see what kind of follow-through the bulls can get. If the bulls get two or three consecutive trend bars, the odds will increase that the February 14th breakout point low (gap) will close. The bears want the endless pullback to continue, but more likely, it is a bear leg in what will become a trading range.

Emini 5-minute chart and what to expect today

  • Emini is up 35 points in the overnight Globex session.
  • The Globex market has been in a bull channel on the 15-minute chart since Sunday’s overnight session.
  • The market recently got an upside breakout during the 5:30 AM PT report time.
  • Traders should be open to the possibility of a bull trend day due to the daily chart.
  • As always, traders should expect a trading range open during the U.S. session. This means most traders should wait for 6-12 bars before placing a trade unless they are comfortable fading breakouts.
  • Most traders should try and catch a swing trade on the open. It is common for a swing trade to happen after the formation of a double top/bottom or a wedge top/bottom.
  • Overall, traders should be open to a possible trend day due to the daily chart. However, traders should expect a trading range open until proven otherwise.

Emini intraday market update

  • The Emini gapped up on the open. When the market gets a reasonably large gap like today, traders should expect a 2nd leg in the direction of the gap (Expect 2nd leg up).
  • A gap is a breakout, and breakouts typically have second legs. This means that traders should expect the bear bar on bar 1 to fail and lead to a 2nd leg up, which is what happened today.
  • The market formed a 2nd entry buy on bar 4. Most bears would exit above bar 4 since the odds favored a 2nd leg up after the gap up.
  • The rally to bar 8 (7:10 AM PT) was strong, and several bull bars closed above their midpoints. This increases the odds that the day will be a bull trend or a trading range day, not a bear trend day.
  • While the market will probably go sideways or pull back to get closer to the moving average, the downside will likely be limited.
  • This means traders will look to buy and scale in lower, betting on a second leg up.
  • The bears got a strong reversal down on bar 14 (7:40 AM PT). This created a 2nd leg bull trap with the rally up to bar 9.
  • While this might be a bear trend day, it is unlikely after the rally to bar 9.
  • It is important to remember that 2nd leg traps often go sideways after they test the bottom of the 2nd leg (bar 4).
  • The bears will likely get a 2nd leg down after bar 14. However, it will probably be disappointing for the bears.
  • The bulls should have gotten a second leg up after the bar 9 rally, and they didn’t. This means there are bulls trapped in a bad buy. The bulls bought during bars 12-14, and they got trapped. These bulls will be happy to sell out of longs on any pullback.
  • This means that sellers will be scaling in higher, limiting the upside. Also, buyers will be scaling in lower, betting the market will pull back and let the trapped bulls out.
  • Overall, traders should expect a trading range day. While it is possible we get a bear trend day, and the market gets a measured move down of the opening 9 bar range, it is unlikely. More likely, the market goes sideways.
  • If the market can develop more buying pressure around bar 18, the odds will begin to increase that the market will retest the bar 9 price level. To do that, the bulls will need to show more signs of strength.
  • The bar 9 area is a magnet due to trapped bulls and bears who missed the selloff on bar 14. Both bulls and bears will look to sell a pullback if it is not too strong.

Friday’s Emini setups

SP500 Emini 5-minute Chart Broad Bull Channel so Trade Like Trading Range. Emini bull reversal wanted.

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

EURUSD Daily: Bears Likely to Become Disappointed Soon
  • The EURUSD is in a small pullback bear trend. However, it will likely end up as a bear leg in a trading range.
  • The first target for the bears is the January 6th low, which will likely get tested sometime this week.
  • The daily chart is likely forming a trading range which means the bears will likely get disappointed by the pullback soon.
  • It is common for legs in trading ranges to appear strong and like they will break out of the range just before the market reverses, and the trading range continues.
  • The daily chart is also getting near the 1.050 price level, where the weekly chart traders will begin to buy, betting on a higher-lower major trend reversal. It is important to remember that 1.050 is just the minimum price level, and the market can go much lower and still form a successful higher-low major trend reversal on the weekly chart.
  • Overall, traders should expect a bounce soon and for the bears to become disappointed.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

SP500 Emini 5-min Cart Buy Climax Broad Bear Channel and Trading Range

Al created the SP500 Emini charts.

End of day review

  • Live stream video trial replacement of end of day review coming soon.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

Trading Room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room days. We offer a 2 day free trial.

Charts use Pacific Time

When times are mentioned, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.

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